WON CASE in PROVINCIAL APPEAL COURT AGAINST CAJA GRANADA (now BANCO MARE NOSTRUM) FOR OUR CLIENT WHO PURCHASED AN OFF-PLAN PROPERTY FROM THE DEVELOPER PROMOCIONES INROAL S.L. AT THE RESIDENCIAL MEDITERRANEO III DEVELOPMENT IN ROQUETAS DE MAR
We were extremely pleased to inform our client recently that we had won their case against BANCO MARE NOSTRUM in the Provincial Appeal Court.
The client paid their off-plan deposit to the developer’s account at BANCO POPULAR. The client did not receive an individual Guarantee for their off-plan deposit from the developer, Promociones Inroal S.L., BANCO POPULAR or from CAJA GRANADA (now BANCO MARE NOSTRUM), the Bank signed a Guarantee Line with the developer.
In November 2014 the First Instance Court in Roquetas de Mar dismissed our Lawsuit and absolved Caja Granada of all claims against it.
Under instructions from our client we submitted an Appeal to the Provincial Appeal Court of Almería.
The Provincial Appeal Court has upheld our Appeal, revoked the First Instance Sentence and condemned BANCO MARE NOSTRUM to refund the off-plan deposit plus interest at 6% per annum from the date the Lawsuit was filed in 2013 plus the costs of the First Instance Procedure.
Re: YOUR CASE AGAINST CAJA GENERAL DE AHORROS DE GRANADA (BANCO MARE NOSTRUM S.A.)
PO xxx/2012
Please find attached Sentence number xx/16 from the Provincial Appeal Court of Almería Section 1.
I am very pleased to advise you that your Appeal has been upheld and the First Instance Sentence has been reversed.
The final paragraph of the First Instance Sentence delivered on 28 November 2014 and notified on 28 January 2015 stated:
“I dismiss in its entirety the Lawsuit filed on behalf of xxxxx xxxxx against CAJA GENERAL DE AHORROS DE GRANADA now BANCO MARE NOSTRUM S.A. and therefore acquit and absolve the defendant of all claims against it with the express imposition of costs on the plaintiff”
The final paragraph of the Provincial Appeal Court Sentence delivered on 11 March 2016 and notified on 16 March 2016 states:
“Upholding the Appeal filed by the legal representation of the plaintiff, against the Sentence of 28 November 2014, issued by the Judge of the First Instance Court No.3 of Roquetas de Mar, we reverse and revoke that resolution, and instead, fully uphold the Lawsuit filed by xxxxx xxxxx, condemning the defendant Banco Mare Nostrum S.A. to pay to the plaintiff the amount of xx,xxx Euros plus interest calculated at 6% from the date on which the Lawsuit was filed; and to pay the costs arising from the First Instance. Without express order for costs of this Appeal”
So your Appeal has been upheld and the First Instance Sentence has been reversed and rescinded.
Banco Mare Nostrum is now condemned to pay you xx,xxx€ plus interest at 6% per annum from the date the Lawsuit was filed in 2013.
Costs of the First Instance procedure are now imposed on Banco Mare Nostrum.
There is no express imposition of costs relating to the Provincial Court Appeal. So each party will pay its own costs in respect of the Appeal.
Interesting statements in the Sentence from the Provincial Appeal Court Magistrates are:
“The present case highlights the problem that arises in house purchases, when this is done before construction work begins or during it, and amounts are paid on account of the final price. The protective legislature in case of work not starting or not completing, for whatever reason, imposes a legal obligation to the promoter to have guaranteed the amounts paid on account by the purchaser as provided in Article 1 of Law 57/1968 and additional provision of the law of construction management by the relevant contract of insurance or guarantee to ensure such repayment.
In short, we insist that, LEY 57/1968 applicable to the case before the Court, establishes general preventive rules ensuring both the real and effective protection of the amounts paid by buyers of homes.
The legislation is clear and transparent, Article 1 of Law 57/1968 states: ‘Individuals and legal entities that promote housing construction of a home or family residence, with either permanent or seasonal use and seeking to obtain advances from buyers before construction begins or during it, must meet the following conditions: 1st. Guarantee the repayment of the amounts paid plus 6% annual interest by insurance contract awarded with an insurance entity registered and licensed in the Register of the General Department of Insurance or joint and several guarantee provided by an entity registered in the Register of Banks and bankers or savings banks, in the event that construction does not start or does not reach a successful conclusion for any reason by the agreed deadline. 2nd. Receive the amounts anticipated by the buyers through a bank or savings bank, which must be deposited in a special account with separation of any other kind of funds belonging to the promoter and which may only be used for the construction of housing. For opening these accounts the bank or savings institution, under its responsibility, will require the guarantee that the above condition refers to’. Article 7 of the Act states: ‘The rights that this Law grants to the buyers shall be considered irrevocable’. First Additional Provision of Law 38/1999 of 5 November on Construction Planning, states that: ‘The receiving of sums advanced for building by promoters will be covered by insurance indemnifying breach of contract to the provisions of Law 57/1968’.
The first argument of the First Instance Court to reject the Lawsuit is the lack of personal guarantee that was never delivered to the buyer by the developer, in addition to denying the existence of a special account. The jurisprudence from the Supreme Court leads to failure the aforementioned reasoning, the failure of the promoter or guarantor to deliver the individual guarantee can in no way harm the buyers, who are unaware of the relationship between promoter and credit institution.
The same is true about the lack of delivery of the sums advanced by buyers to the special account, since this is also an obligation of the promoters, the account opening and depositing the amounts. The contract states that the advance payments will be guaranteed by bank guarantee granted by Caja Granada office 0503 Calle Benizalón # 1 of Almería and there is a Guarantee Policy and Guarantee Line signed on 17th October 2005 between the entity and Promociones Inroal.
Finally, as to the fact that the Bank did not participate in the financing of the promotion where the plaintiff purchased; we must say that the law does not require this to lead to an obligation to guarantee. Conversely Article 1 of Law 57/1968 provides for the assumption that future buyers payments delivered before construction work begins or during construction and Article 2 requires repayment in the event that construction does not start or complete by the agreed time. We reiterate the obligation to open the special account is that of the promoter as well as ensuring the funds received are paid into the special account.
The fundamental test, according to the First Instance Court is that the defendant is not bound by any General Guarantee it has provided because there is no record of the buyers payment in the account linked to the General Guarantee. This Court does not share the reasoning of the First Instance Court because it is clear that there is a general policy issued by the bank in favour of the promoter to guarantee amounts paid by buyers and the fact that advance payments have been deposited in accounts specified by the promoter but no individual guarantees have been issued, is the responsibility of the bank. The bank was aware of the operations of its client – a housing promoter whom it had guaranteed and of several buyers of this promotion. As to which account the buyers funds were paid is the responsibility of the developer because the buyer follows the vendor's instructions.
As the old aphorism says things are what they are and not what the parties say they are, as rightly pointed out by the appellant, the evidence must be assessed as a whole, and although the policy has a definite end, the documents precisely reveal the facts. In short, the payment obligation arises clearly; to no avail the objections raised because relations between the developer and the bank can not harm the buyers. The need for individual endorsement and approval of the bank to grant it, are matters that affect the contracting of the policy, but not the buyers. We must not forget the last sentence of the second paragraph of Article 1 of Law 57/1968: ‘For the opening of these accounts or deposits the bank or savings bank, under its responsibility, will require the guarantee referred to in the above condition’. Responsibility is born from the moment that the special account is opened and the buyers amounts are accepted into the account”
BANCO MARE NOSTRUM has 20 working days from the date of notification of the Sentence, which was 16 March 2016, to comply with the Sentence or to file a Cassation Appeal to the Supreme Court.
If a Cassation Appeal is filed by the defendant it will be necessary for us to file an Opposition to the Appeal on your behalf.
Roquetas de Mar, Almería, South eastern Spain